"There is today in England no such thing as a free-standing general right by a famous person (or anyone else) to control the reproduction of their image." So said Mr. Justice Birss in a recent case between the pop star Rihanna and clothing retailer Topshop in the United Kingdom High Court (Fenty & Ors v Arcadia Group Brands Ltd (t/a Topshop) & Anor).
This direct reference to the current status of image rights in the UK seems to be directly at odds with the currency of images and celebrity around the world. It also seems to be at odds with the taxation of such rights in the UK and abroad and the contracts that celebrities and businesses enter into daily in relation to these rights.
For many years, it has been common practice for sports stars and entertainers to have two streams of income, namely performance income and "other" income. Monies from endorsement and sponsorship deals as well as ad hoc payments for personal appearances fall into the "other" category. This split income system recognizes that such individuals can earn money from two distinct sources, one active and one passive. In many cases, these ad hoc duties have been given the collective title of image rights and the concept of payments for image rights services has become commonplace.
It therefore seems illogical that the legal system has failed to recognize these rights as a separate piece of intellectual property (IP) and has not allowed for a system of registration like that for trademarks. Equally illogical is the taxation of rights which do not exist. The UK tax collection authority (Her Majesty's Revenue & Customs, (HMRC)) has recently given some capital gains tax commentary in relation to image rights which goes a long way in setting out the parameters in this area, but this does not alter the fact that such rights supposedly have no legal standing.
Interestingly, HMRC's commentary deals with the transfer of image rights to third parties ((see -Intellectual Property Rights: assignment of "image rights" (CG68420): www.hmrc.gov.uk/manuals/cgmanual/cg68420.htm). The gap in UK law in this area described above means that any transfer of image rights in the UK is essentially the transfer of goodwill. As the existence of goodwill hinges on the existence of real business activity, many such transactions will be potentially void because no business has have been conducted around image rights by the original owner. This is akin to a trade mark owner losing his or her mark for non-use.
How did we get to this point? What is it about image rights that makes them so intriguing and their treatment so disparate? Is it because they are generally associated with famous people?
CELEBRITY STATUS SPAWNS INTEREST IN A NEW RIGHT
The concept of an image right is fairly new. The iconic 1970s English soccer player, Kevin Keegan was the first sports personality to actively enter into what was then known as a "face contract" for what were essentially his image rights. The deal, concluded when he moved from the UK to Germany, reflected his notoriety beyond the pitch and his ability to sell merchandise. While the US has long upheld a "right of publicity", its acknowledgment varies from state to state and its application is somewhat random. Only around half of the states recognize it. That said, the US has been far more forgiving in terms of recognizing the commercial aspects of such rights than, for example, the UK.
In today's more litigious environment, there are numerous news items relating to the image rights of famous personalities.
For example, Rod Stewart was sued for using a picture of himself taken by one photographer similar to one taken by a different photographer (www.petapixel.com/2014/09/07/photographer-sues-rod-stewart-2-5m-recreating-photo-back-head/), and Goodfellas' actor Frank Sivero sued the creators of The Simpsons claiming they stole his likeness to create the animated character Louie (www.theguardian.com/tv-and-radio/2014/oct/22/goodfellas-actor-frank-sivero-lawsuit-the-simpsons). Similarly, Lindsay Lohan and Manuel Noriega have sued over the use of their likenesses in video games (www.theguardian.com/technology/2014/oct/13/lindsay-lohan-manuel-noriega-suing-video-games-legal-view).
Such litigation only exists where the claimant believes there is something of value to sue for. All these claims are being brought in the US where the rules governing the "right of publicity", while more developed than in the UK, still do not offer any form of registration system for the rights.
So how can the law help people who are damaged as a result of the unauthorized commercial use of their personal image? The answer, in the UK at least, has been to utilize an amalgam of privacy law, passing off and the tort of false endorsement to create a patchwork of rights, none of which is ideally suited to the commercial realities of today's celebrity culture and the power of the Internet.
A number of UK court cases including Douglas v Hello! Ltd, Edmund Irvine and Tidswell v Talksport Ltd and the Rhianna case mentioned above illustrate some of the different legal approaches used to address this difficult area. Each case rested on specific facts. There is no consensus about how image rights should be dealt with either from a general legal perspective or from an IP perspective.
My view is that the radical changes brought about by the Internet over the past 20 years, mean that the traditional tools of copyright and trademarks are unable to deal with image rights issues. Copyright only protects the creators of works (or their assignees) and trademarks have a distinct function to protect names and brands in the sectors within which they operate. There are no specific legal tools which define image rights or redress the harm caused by unlawful use of a person's image.
GUERNSEY ESTABLISHES WORLD'S FIRST IMAGE RIGHTS REGISTRY
At any rate, that was the case until Guernsey, one of the UK Channel Islands, took the brave step in 2012 of implementing the world's first image rights registry. In doing so, the Guernsey authorities made it possible to codify personality and image rights into a fully functioning form by registering them. Image rights can now be accurately recorded in relation to a particular personality. The registry accommodates several different categories of applicant and allows for several different forms of personality to be registered – individual, joint, corporate, fictional and group. It also allows for the registration of a huge range of acts, including gestures, mannerisms and voice files, to name but a few. In sum, the registry makes it possible to register a full "picture" of a personality. Once registered, each of these rights may be licensed, sub-licensed or assigned in the same way as other intellectual property rights. This in itself is a huge step forward in terms of recognizing these rights and giving them legal clarity, something that has proven difficult in the past.
Having registered the rights, the owner (which can be any person or entity anywhere in the world) can make direct reference to specific image rights when structuring any endorsement contracts or sponsorship deals. This can be advantageous in the event of a dispute. Under Guernsey law these rights may also be willed either in part or in whole, ensuring that valuable assets pass seamlessly to the next generation. And the rights can be renewed ad infinitum, providing an enduring asset class. Contrast this with the time-bound nature of copyright and it is clear that image rights may represent huge value to the personalities in question and their heirs.
As with trademarks, copyright and patents, ownership of image rights can have tax consequences, and the way in which such assets are licensed or sold needs to be managed carefully to ensure they remain tax efficient. The ability to be able to structure and manage these rights is just one reason why they are so popular among rising and established stars. For example, as careers in sport are notoriously short, it is important for athletes to maximize their earnings during their career in order to provide for a time when they are no longer at the top of their game.
These image rights also provide a mechanism by which to tackle cases of infringement by unauthorized third parties and commercial dealings. Like other IP rights, image rights are territorial in that they only have a legal effect in the country or region in which they are granted. However, any infringement online will potentially be subject to the jurisdiction of the Guernsey courts and thereby subject to the Guernsey image rights legislation – and the online environment is where most modern-day infringement is likely to occur in relation to these rights.
Furthermore, as with the enforcement of trademark rights, either the owner of the rights or their licensee can bring proceedings. Rights could be owned by a third-party company or licensed to a sponsor, either of which would be able to take action against any infringement without necessarily having to involve the personality him or herself.
By legislating in this area, Guernsey has set a benchmark for other jurisdictions to watch and potentially copy in the future. There is no doubt that image rights will become increasingly important and valuable as the Internet matures and the cult of celebrity maintains its apparently unbreakable hold on the public. Just as the photo-sharing website Pinterest raised some interesting questions for copyright law, so the Guernsey image rights regime raises questions about the effectiveness of traditional tools of the IP system in addressing image rights. With over 60 registrations since its launch in 2012, there is clearly growing demand for image rights. How long will it be before other jurisdictions take similar steps to ensure that the image rights of personalities are effectively addressed under their national laws?
An original Russian version of this article was published in WIPO Magazine, May 2015.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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